When you are trying to create price points, a great way to look at it is from a time or appointment window. As a result, you want to base it on the time for which you have scheduled the procedure, or the time required to complete the procedure.
Complexity is hard when we are talking about insurance cases because coding is based on time, and the audiology codes themselves are based upon time and complexity at this point. That is fantastic when we are not billing insurance. Ian Windmill presented a course on AudiologyOnline about itemization or unbundling on complexity during the course series. You want to base your fees for the items and service where no fee schedule exists. Once you start going above that, it is very difficult to achieve reimbursements from third-party payers.
#V5261 hearing aid plus#
The rule of thumb is you do not want the gray zone, which for audiologists is somewhere between $200/hour and $250/hour for a breakeven plus profit. Ultimately, at breakeven, you will want to add a profit to that. It helps you to have better control of your expenses. If that minimum is low, that will allow you to maximize your profit to a better degree. If that minimum is too high, you need to bring your expenses down. That is what you need to bring in every hour per full-time person to cover your expenses at minimum. Your breakeven point is the minimum that you can ever accept. The American Academy of Audiology (AAA) itemization guide created several years ago, and it is available at their website, It can walk you through the steps of creating your breakeven-plus-profit figure. This is about everything other than those hearing aid costs. For all of your overhead and expenses, what do you need to bring in every hour to cover it and make a profit? Hearing aid procurement costs, or the cost that you pay for the hearing aids and ear molds or assistive listening devices that you re-sell, would not be part of this calculation because they are variable and are replaced with their own specific revenue. Factor in your fixed expenses, such as salaries, utilities, calibration, continuing education, benefits, office supplies, impression material, equipment, and/or annual fees. It is important to figure out what your business/practice needs to bring in every hour per full-time equivalent provider to cover your overhead, no matter if you work in a private practice, an otolaryngology practice, in a hospital, or non-profit. Hearing aid or procedure pricing should reflect an understanding of your personal breakeven analysis, an understanding of your third-party payer fee schedules, and an understanding of the prevailing rates in your area. We have a lot of codes and procedures at our disposal indicating that we are the most qualified people to provide those services, and we should feel comfortable charging for those procedures. They feel they have to compete in a world of “free.” I do not believe you need to do that.
I sense a tendency for audiologists to be reluctant to charge for things. Most pricing strategies are not based on anything tangible or any sort of formula. I often ask, “How did you come up with your pricing?” The most typical answer is a question mark or some multiple of invoice (when it comes to hearing aids). In the course of my consulting work, I review many pricing strategies. If you have questions about how insurance works with regard to dispensing hearing aids, please refer to the course, Managing Hearing Aid Delivery within an Insurance Model. If you have questions about the specific codes that we are going to discuss in the pricing models, they are covered in the Essentials of Audiology Item and Procedure Coding course. Kim Cavitt: After this course, participants will be able to describe the pros and cons of the different hearing aid delivery models, define the differences between bundled and unbundled pricing as it relates specifically to hearing aids, and list what constitutes as bundled hearing aid price package.
Editor’s Note: This text course is an edited transcript of a live webinar.
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